The BOT of Trustee's will address Amendment 64 requirements regarding retail marijuana at their March 5th Workshop. Below is my report to them regarding their options for addressing new laws in Colorado legalizing the licensing of four types retail marijuana businesses. I've also attached a synopsis of Colorado Retail Marijuana law written by Colorado Municipal League Attorney Rachel Allen and a memo to the Board from our own Town Attorney Kathryn Sellars. Public Health Director Tara Hardy and Sheriff Ron Bruce will also be present to address the BOT. If you are interested in reviewing all the information that the BOT will review, please visit our Board page and download the packet for this workshop.

A draft was previously posted. This final version was posted March 3, 2014.

To: Mayor Vierheller & Lake City Board of TrusteesFrom: Leslie Klusmire, Town ManagerRE: Options for addressing Amendment 64 Re: Licensing Retail Marijuana BusinessesDate: March 5, 2014 Requested Action:Direct the Town Manager and/or the Town Attorney to further investigate options, or prepare recommendations including a draft ordinance governing licensing of marijuana businesses and/or an ordinance for a ballot question in November 2014 as desired by the BOT. Background: The Town of Lake City has conducted the following elections and adopted the following ordinances related to marijuana in response to changing marijuana legislation: In November of 2000, Colorado voters approved Amendment 20 (Article XVIII, Section 14) to the Colorado Constitution which allows the possession and use of limited quantities of marijuana by qualified persons.Ordinance 5-2009 (December 30, 2009) which imposed a six month moratorium on the review of applications for medical marijuana dispensaries to allow time for a study to be made as to range of impacts and options for any BOT decision regarding medical marijuana.Ordinance 2-2010 (June 16, 2010) extending the moratorium through June 30, 2011. In June of 2010, the Governor signed into law House Bill 10-1284 (C.R.S. 12-43/3-101) which allowed municipalities to permit businesses to cultivate, produce and/or sell marijuana for medical purposes.Ordinance 4-2010 (August 8, 2010) to submit to the voters a question of whether to allow medical marijuana centers, premises for cultivation operations and medical marijuana infused products manufacturers’ licenses with the town for the November 2, 2010 general election.When the majority of voters voted to prohibit medical marijuana licensing, the BOT adopted Ordinance 1-2011 (January 5, 2011) prohibiting the establishment and operation of certain medical marijuana businesses with the town including cultivation, production of products or sales. On November 6, 2012, Colorado voters passed Amendment 64 which allows persons of 21 years of age or older to legally consume or possess one ounce or less of marijuana, and for retail marijuana sales to be taxed and licensed. In response, the Colorado legislature passed House Bill 13-1317 establishing state regulations for retail marijuana sales.Ordinance 3-2013 (August 21, 2013) establishing a temporary moratorium regarding the establishment of any retail marijuana business until December 4, 2014 to allow time for the BOT to study the impacts and options for retail marijuana sales. This Board is now considering options for licensing the sale, cultivation, product manufacture, and/or testing facilities for retail marijuana within the Town of Lake City. During your workshop, Sheriff Ron Bruce and Public Health Director Tara Hardy will be present at your workshop to present concerns from the perspective of law enforcement and public health. Rachel Allen will be available from CML via phone to go through options and answer questions in the big picture such as what other jurisdictions have done and what the CML is learning about the issue from a statewide perspective. Kathryn Sellars, the Town’s attorney, will be available via phone to answer questions regarding application of marijuana laws to the Town. Ms. Sellars will also be available if needed during your regular meeting. Issues: The central issue is whether the Town will allow or prohibit retail marijuana businesses. If you elect to prohibit any or all of those businesses, you must do so by ordinance. If you want to consider how you might incorporate marijuana businesses into Lake City, the following are some staff recommended options for your consideration. I’m going to use Kathryn’s outline to present some staff recommended options that are specific to Lake City. Types of Licenses: A. Retail Marijuana Store B. Retail Marijuana Cultivation Facility License C. Retail Marijuana Products Manufacturing License D. Retail Marijuana Testing Facility License Staff Comment: The retail marijuana laws assume that those entities which elect to allow retail marijuana business licensing have already allowed medical marijuana businesses. Lake City prohibits medical marijuana businesses. While you could elect to only allow retail marijuana businesses without medical marijuana sales, you also could elect to reconsider certain types of medical marijuana businesses. If you did decide to include medical marijuana businesses in your consideration, there is a choice for you to allow retail marijuana and medical marijuana businesses to coexist in the same location (they have to be kept at separate counters within a business) OR to only allow one or the other within any one business. At this time, there are no retail businesses that don’t also sell medical marijuana because the statute doesn’t allow new applications for retail marijuana until October 1, 2014. All of the retail marijuana licenses that have been issued are conversions from existing medical marijuana licenses. (Rachel Allen, CML) Options for additional regulations by ordinance for any or all of the above types of licenses. a. Time Example: Hours and Days of Operation b. Manner of Sale Example: All sales must occur out of the view of the public or all marijuana must be secured and only accessible by employees or owners of the establishment. c. Place Example: Zoning Districts where activity is permitted (See Zoning Map of 1991) The Central Business District (CBD) is approximately seven block core that extends from 1st to 4th Streets and between the alley to the west of Silver Street and Henson Street (narrower by about a ½ block between 1st and 2nd Streets). Retail uses are allowed by right. Light industrial uses are allowed by conditional use if they meet the standards of subsection D (i.e.: might create a public or private nuisance). Should you wish to allow retail marijuana sales, this is an appropriate zone. It is conceivable that if you should also elect to allow marijuana cultivation, product manufacture and/or testing, they could be allowed in this zone with a conditional use permit. The General Business District (GBD) is generally located at the north end of town – north of 8th Street and generally following on either side of SH149. If you should elect to allow any or all of the four marijuana business options including retail sales, cultivation, and product manufacture and/or testing, they could be allowed in this zone by right. Those two districts are most appropriate for retail businesses. The GBD is most appropriate for cultivation, product manufacture and/or testing businesses. After consultation with our attorney, I would recommend that if you want to permit marijuana businesses you should not limit the location of a marijuana business within the district any more than you would limit the location of any other retail business. You can make any or all of the marijuana businesses conditional uses instead of uses by right, which allows you to set criteria by which the Town evaluates whether a use is appropriate to a particular site and therefore allows the Town more leeway in location. The Tourist Zone allows retail businesses of less than 600 sq. ft. by conditional use. This would be an option only for the retail sales type business and not for the other three. It would be my opinion that the retail use defined as small crafts sales or production business allowed by right would not include marijuana businesses of any type. To eliminate any possible challenge, you may want to outright prohibit marijuana businesses in this district. The town allows home occupations as an accessory use in any dwelling unit regardless of zone as long as it meets certain standards. It is conceivable that if you do not specifically prohibit any or all the types of marijuana businesses covered by Amendment 64 to be defined as home occupations, they could be conducted under the home occupation rules. d. Number of Establishments I would recommend you limit the number of establishments of any of the four types in certain zone districts. You may want to consider making each a conditional use with standards that have to be addressed in order to be licensed. I would not recommend that you allow any of the businesses in any zone except CBD and/or GBD. e. Local Licensing requirements We can develop recommendations for licensing requirements for any or all of these types of businesses within the confines of the law. f. Fees. A local jurisdiction is permitted to impose operating fees if the local jurisdiction has a local licensing requirement. Our Attorney will have further information on how revenue from marijuana sales is available to towns and what revenue options there are. We can develop recommendations for fees within the confines of the law. You of course have the option of directing staff to draw up ordinances to: 1. Allow any or all of the above types of businesses in certain zones with certain restrictions as previously described. 2. Enact a prohibition by ordinance of any or all of the above types of licenses. 3. Put the question of whether to allow or prohibit any or all of the above types of licenses in the November 2014 ballot. 4. Draft an ordinance considering the options for regulations listed above and put that before the voters for approval or rejection on the November 2014 ballot.